What is Merchant Circle up to now?

Why is Merchant Circle buying up thousands of trade name + locale domains?

Over the weekend Nick Reese contacted me to explore what appeared to him, and to me, very unusual domain activity by Merchant Circle. It appears that Merchant Circle has purchased as many as 10,700 domains. These domain purchases have been going on for a number of months and are often in the format of localbusinessnamelocale.com. MC has gone on to create a website for the business based on the unverified Merchant Circle record and appears to have done so without permission or engagement of the business.

The whois records show MC as the admin of record for all of these domains.

Many searches on these trade name domain with locale show the MC result in the One Box (due to Google assigning it to unclaimed records) and in positions one and two on the main results page.

I called several of the business owners, including Art & Faux, to determine whether any had in fact authorized MC to purchase the domain on their behalf. The three owners with whom I spoke indicated that they had not given them any authority to purchase domains in their name nor had they paid MC for a domain.

Is this MC’s newest SEO strategy to gain additional footing on the first page of Google? Are they taking cybersquatting to a new level to gain Maps traffic from the new local focused Google SERPS or are they just giving away domain names to businesses that “forgot” to buy them? I am trying to understand why MC would spend $70,000 on domain purchases, many of which have include the trade name for local businesses.

35 thoughts on “What is Merchant Circle up to now?”

how is this even legal?! at the bottom it says “(c) 2009 Art & Faux” – what happened when you talked with them, were the businesses angry this had been done?

The content is so sparse, with links that deceive the user into thinking there are things like a blog and newsletter, when they are all just links to nowhere. And then they have the so-called “related searches” at the bottom, they are just using it to increase seo juice all over their network. This is really revolting.

Good question. I am not sure that it is legal. Art & Faux was not a going concern so they were not upset. The other two were too busy to spend much time talking. I would be upset if it happened to me. Certainly it appears that MC has once again stepped over the bounds of propriety. Is it trademark infringement? I don’t know enough about the law in that area but if it were me, I would have my lawyer all over them.

Unbelievable. No, make that very believable given their methods of doing things.

It’s actually a great idea IF YOU GET THE PERMISSION of the business owner first and include it as part of your small biz services. But to just go out and register other company’s names and put up web sites without them knowing? sigh………

Domaining and linkfarming all rolled into one? Has MC sunk to a whole new level of carelessness regarding their own reputation? Incredible.

Good catch on this to Nick & Mike. I guess what I’d like to know is what happens when, for instance, the plumber goes to register is domain name and discovers it’s already taken. Does he realize who has it? Does he know how to do a whois? Does he shrug and chose another domain name and remain clueless as to why he’s being outranked for his own name by a property he doesn’t own. Does he figure it out and contact MC…and what happens when he does? Is he offered this domain for $? Is that tied into enrolling in MC’s program. Just what exactly is going on here.

MerchantCircle members can get an Instant Website in one of three ways:

1) They buy it — the vast majority of MerchantCircle members do not have their own website (around 75%). Our members tell us that they would like to have a “branded” URL that they can add to their business cards and flyers. When we set about to create the service, our members told us they would prefer to have all the content they’ve created on their MC listings. So, when a members buys the service we (in about 2 seconds) get the domain up with all the images, blogs coupons, etc. that the merchant built.

2) They get it free with a purchase — for members who buy our paid services, we often allow buyers to throw in an Instant Website free for x months. This Instant Website behaves in the same way as #1. Members also receive an Instant Website when they sign up for a business email account with MerchantCircle (this way they have an @businessname.com email address versus freemail).

3) We give them away — in very limited cases, we’ve gifted Instant Websites for free to our top members. In this case, we notify all our merchants of this through multiple channels. In less than 0.1% of cases, merchants have asked us to give them control of the domain and we’ve done this free of charge. Any merchants who received a gifted domain can contact us with questions at jennifer_at_merchantcircle.com (please replace “_at_” with “@” when emailing).

Only members in good standing with MerchantCircle can receive an Instant Website. We are not claiming listings in the Google Local Business Center. While merchants have asked us for this service, we’ve decided not to get into this business.

Hopefully this answers some of the questions coming up. We are always looking for ways to improve our Instant Website service and would appreciate feedback.

Our goals at MerchantCircle are: 1) to help local merchants get more customers online and 2) to connect local businesses with one another online. Our 740,000 local merchant members are receiving traffic from the millions of local consumers each week, and we’re excited to play a small part in promoting the rich local content our members create.

Thanks,
Darren

P.S. I’d be happy to discuss with you directly if you’d like. Let me know.

Thanks for stopping by and explaining your program. I would very much like to discuss it with you.

Let me explain my methodology….
I randomly picked 6 businesses out of the list of your registered domains. 3 were not available to speak with me. Of the remaining 3, all said that they had not requested nor approved of you buying a domain in their name. But, I am a nice fellow, let’s give you the benefit of the doubt and say that they received it as a “gift” from you.

How then do you explain http://www.terrydonsplumbingllc.com? What kind of gift is that? You linked to it, you linked from it. Unfortunately Terry Don wasn’t in when I called but does he know that he is linking from his domain to 20 other local plumbers? Hard for me to imagine that he does.

Gifts like that are not considered gifts in my family. It’s rather like me giving my wife a new frying pan for Christmas and telling her to get to work on my behalf.

While it would be inappropriate for us to discuss individual merchants, let’s take a hypothetical example:

If a local service provider buys one of our paid products, s/he might add a free Instant Website for 6 months. If after 6 months, they choose not the continue the Instant Website service, we take it down and replace with a geo- and category-specific directory page until the domain expires. Usually, the merchant gets top billing on the directory page.

So, in this example, the merchant gets a free Instant Website for 6 months and a featured listing for free for 6 months. Even if they have not paid for the instant website, they will get benefits until the domain expires at the end of one year.

Because we introduce 10’s of thousands of merchants every month to the local web, we are excited to offer this service which was requested by our merchants and delivers real value. Instant Websites have been a real hit with our members…

On Cathy’s note from above, those of us in the local business know that spamming activity is an ongoing issue, especially in the flowers category. We’ll investigate the example she provided.

MerchantCircle continues to improve its tools to block this sort of behavior. We remove lots of listings every day that are flagged by our 740K merchant community. It is fascinating to see how far the MerchantCircle community goes to catch these guys. As you may be aware our terms of service provides for a $1000 penalty for these behaviors (a few spammers have found this out the hard way).

Nice catch by Rose and Ahmed. This was a bug and will be fixed soon.

We appreciate all this input. A question for your readers: As we build out tools to help local merchants, how can we enable their SEO providers to take advantage or the ‘Circle to drive more consumer traffic? We’ve been in discussions with leading local SEOs and we’re looking for your input as we develop a new SEO-friendly API and toolkit.

Sorry I am late to the scene. Darren, this is the first time I have seen a MC Rep stop by on ANY Local Search blog so kudos for making an effort to manage your company’s to-date disastrous reputation.

I have one question and one observation:

“So, in this example, the merchant gets a free Instant Website for 6 months and a featured listing for free for 6 months. Even if they have not paid for the instant website, they will get benefits until the domain expires at the end of one year.”

– What happens when the domain expires? Do you squat on it? Do you send an email saying “it’s critical to claim your domain”? My concern would be that there are all kinds of domainers ready to snap up a domain with history (and PageRank) and if it falls to a third-party, the small business owner has lost this “gift” forever, causing potentially irreparable harm to his brand. Even if he discontinues a paid program, he may not understand the value of buying it for $199 at the end of it.

– Just linking to unrelated businesses purely because they are MC customers seems like a blatant attempt at PageRank manipulation, not unlike what Real Estate Webmasters was doing last year…but at least you are not using anchor text.

Other than that, I do see value in creating a website for an SMB that is up-and-running within hours. The question is, do they understand the process well enough…and that is where I think MC may be falling dangerously short.

This too raises the hair on the back of my neck, though if done right (read, done better) could actually be a pretty valuable service for SMB’s. David’s question about what happens upon domain expiry is certainly a good one.

But it is likely entirely legal. Potentially sleazy, but legal. Trade names that are not trademarked are open season, except at the “local level”. By that I mean a business that has registered it’s name with the State authorities has some limited protection on the use of that name within their operating area. You would not be permitted to register another business with the exact same name in the same city. But of course you could in any other city, unless its been legally trademarked through the patent and trademark office.

So MC should not be doing this for businesses in Los Altos, CA else they would likely end up in court over it.

Disclaimer: I’m in Canada (some of the regulars here know that) and that is how it works at the Provincial and local level here. I’ve had discussions with trademark lawyers about the ins and outs of names. I am assuming it would be quite similar when registering local business names in the US.

Bridger Bay — something like 40% of SMB’s still don’t have a website. Add in the percentage of those that don’t understand the words “domain name” and you’re probably closer to 60-65% in the “stupid” category. Seems a bit harsh.

1) We do not condone spam, paid or otherwise. Managing 740K members and tens of thousands of transactions with our small team is a challenge. But, we’re getting better and it’s largely due to our members’ passion for protecting the “hygiene” of the network. We’re also honing automated processes to catch these.

2) We do not squat on Instant Website domains after they expire. We return them to the available pool. While we make our best efforts to let merchants know the value of continuing to control the domain, sometimes they just don’t renew.

As for the $199 transfer fee, that’s something we put in place to prevent people from gaming our system to get free domains — at our scale, we had to put some measures in place to prevent losing our shirts. In the example I cited above, we bought the domain name to give a free Instant Website to the merchant for 6 months and never received compensation. Those $7/yr domain reg fees add up at our size.

To date, we haven’t collected a dime from the domains our merchants have asked us to transfer a name over to them.

3) As for David’s linking comment, those links are showing up because the merchant has “friended” another merchant on the ‘Circle. These are not random, unrelated businesses. Remember that we are a social network of interconnected businesses who work with each other to share ideas and network. (And, our Instant Website are live in literally seconds, not hours…)

Bridger Bay — respectfully, your comments are way off-base. Our members are very busy running their small business 12+ hours a day in a very tough economy. They tell us that the typical online marketing solutions out there are too complicated, too expensive and largely don’t work. It’s all a question of where to focus time. You may be an internet marketing guru, but how are you at repairing a leaky roof?

MerchantCircle is committed to bringing real value to our free and paying members simply and for free/cheap. I appreciate all your input and would be open to more ideas about how we can all help local businesses succeed in tough times.

Darren, thanks for responding. Personally, I don’t have a problem with the $199 fee; you guys have obviously put in development time to build this platform and that seems like a fairly reasonable amount (heck, cheaper than a one-year Yahoo Directory link) to ask for in return.

I would like to know more about your “best efforts to let merchants know the value of continuing to control the domain” — have you publicly published the email that you send them that we can take a look at & provide feedback? Are there numbers to call for support, or at least FAQ’s like

Q: “What happens if I don’t renew my registration?”
A: “It’s almost certain that a scam artist will snap it up immediately and extort you if you ever decide you want it back. By not renewing, you are essentially making a PERMANENT decision that you will never want this domain again.”

I just worry that, as you say “the typical online marketing solutions out there are too complicated,” and domain names are certainly complicated.

I’m still not sold on the real value what seems like a large-scale automated linking scheme but we can agree to disagree.

@David Mihm: You’re right, using the word “stupid” is maybe a little harsh, but I have a hard time coming up with a phrase that better describes this shocking situation (40-75% of SMB’s with no website).

@Darren: I have owned a number of offline businesses, and let me assure you I’m aware of the headaches and hard work involved.

However, even most Joe Plumbers that I know will consult briefly with a lawyer when they start their business, and will visit their accountant once a year for 1/2 hour. Unless they are very reckless or very stxxxd (sorry, couldn’t resist). In my opinion, in 2009 owning your domain name is every bit as much a part of the due diligence process as reviewing your taxes with your accountant.

I agree that existing online systems are too complicated, expensive, etc.. All I said was that they should register their domain. It’s not that difficult; “Hey neighbor Bill, what’s a domain?” Bill says, “I dunno, but my cousin told me about this godaddy thing and he says it’s real simple. Maybe you should check it out…”

I don’t think you missed anything. MC has expalined their reasons that all of these things occurred as noted but in the end it appears to be self dealing to a certain extent. Otherwise all three of the businesses that I called would have had some clue what I was talking about.

I am upset with MC because I naively entered an email message to what I thought was my attorney’s sanctioned site and find that it comes up with every Google search of my name!
My personal contact information is revealed as well as personal comments of a legal nature.
I cannot contact MC’s webmaster as per the Google information removal protocol and need assistance in getting this data removed.
I’ve tried to contact “Darren” from MC in the above string–but cannot get through via an email message.

Please send an email to our customer support rep at jennifer_at_merchantcircle.com (please replace “_at_” with “@” when emailing). Please mention my name in the subject line of the email and I’ll make sure we take care of you.

I have 3 locations of The UPS Store franchise in Lakeland, FL and since January have been spending an extensive amount of time trying to get my head around the entire internet search engine / advertising topic.

I am one of the merchants on ML. As a non-tech savy retail operator, I will take any help I can get! I’ve been actively working my site and attempting to involve other retailers in my area and shopping centers.

You all now have a perfectly willing guina pig with sites you can look at from the perspective of this blog and give me insight. Of course, you may also say I’m a trusting idiot for volunteering, but just picture me wearing rose-colored glasses and have at it!!!

I wanted to respond becuase I had a $348 charge on my debit card. I tried to contact MC many times with great difficulty and did receive a call back from a David . The charges to my account were explained to me because I paid for a website for a company called Bit Market. MC had my credit information and also my home address linked to the creation of this web page called New Zealand Authentics. Long and short of the story they did not have my email address which is needed to sign into the account nor did they have my authority. They are fully aware that my credit card was misused. They explained to me that the company that is listed can’t even be contacted because it is a bogus phone number listed on MC and goes to a fax machine. The so called Bit Market is in Kenosha,WI. Anyhow MC representative David was empathetic to my story and is in full awarement that my debit card was misused by this so called company selling electronics. They got my card information because my son tried to by an Apple Touch off a company called GigaDrive which unbelievably is no longer searchable on the web. Hum how interesting. What I don’t understand is why MC would continue to carry the listing for Bit Market if they know it is bogus and maybe they could be a bit more helpful by sending me a letter to turn into my debit card company so maybe I can recoupe the money when I contest the charges with the card company. And Darren I know you have responded to this site and I will cut and paste this onto the other address you listed. Maybe you can talk to David and get my number he has both my home and work and we can get this taken care of. Sadly enough this isn’t money I worked for but was my son’s child support money. If you don’t believe me look up Pennsylvania Eppicard. Thanks so much and Darren hope to verbally hear from you soon.

Yes, I FULLY agree with the comment made about Fraudulant business’s being listed through Merchant Circle. Instead of me elaborating now you can just go to merchant cicle and 1st type in Evergreen Nursery Evansville Tn……. Then after reading that blog and review and comments go on over to Custom Landscaping and Design Dayton Tn. The county lines must be right their about 1/2 way between them because they are not even 5 minutes apart! My expierence was sooo unnessary But I honestly thought by being listed under something like Merchant Circle which i happened upon through DavesBackyardgarden.com . But I do believe I am telling you right that Evergreen was also listed as a choice in Daves web site? I would havet
to go back and look BUT i do know for a fact that thats how i stumbled up on Merchants Circle and stupid like took their site as legit just as I did Evergreen? NOT!!!!!!!!!!! So yes, You will see in my complaint to Merchant Circle in their contact us area that I wished they could drive down or up Im not even sure where they are located? Point is I wished that they could drive to EVERGREEN NURSERY in EVANSVILLE TN RHEA HWY. And see what a flimflam outfit they were representing! Thank YOU for the chance to share this with YOUR Reader’s, I want to get this out to as many people as I can EVEN though I hope their not all as gullable as I am!!!!!!!!!!! Truly Cindy/Loudon

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